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Applying engineering and fleet detail to represent passenger vehicle transport in a computable general equilibrium model

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  • Karplus, Valerie J.
  • Paltsev, Sergey
  • Babiker, Mustafa
  • Reilly, John M.

Abstract

A well-known challenge in computable general equilibrium (CGE) models is to maintain correspondence between the forecasted economic and physical quantities over time. Maintaining such a correspondence is necessary to understand how economic forecasts reflect, and are constrained by, relationships within the underlying physical system. This work develops a method for projecting global demand for passenger vehicle transport, retaining supplemental physical accounting for vehicle stock, fuel use, and greenhouse gas (GHG) emissions. This method is implemented in the MIT Emissions Prediction and Policy Analysis Version 5 (EPPA5) model and includes several advances over previous approaches. First, the relationship between per-capita income and demand for passenger vehicle transport services (in vehicle-miles traveled, or VMT) is based on econometric estimates and modeled using quasi-homothetic preferences. Second, the passenger vehicle transport sector is structured to capture opportunities to reduce fleet-level gasoline use through the application of vehicle efficiency or alternative fuel vehicle technologies, introduction of alternative fuels, or reduction in demand for VMT. Third, alternative fuel vehicles (AFVs) are represented in the EPPA model. Fixed costs as well as learning effects that could influence the rate of AFV introduction are captured explicitly. This model development lays the foundation for assessing policies that differentiate based on vehicle age and efficiency, alter the relative prices of fuels, or focus on promoting specific advanced vehicle or fuel technologies.

Suggested Citation

  • Karplus, Valerie J. & Paltsev, Sergey & Babiker, Mustafa & Reilly, John M., 2013. "Applying engineering and fleet detail to represent passenger vehicle transport in a computable general equilibrium model," Economic Modelling, Elsevier, vol. 30(C), pages 295-305.
  • Handle: RePEc:eee:ecmode:v:30:y:2013:i:c:p:295-305
    DOI: 10.1016/j.econmod.2012.08.019
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:enepol:v:113:y:2018:i:c:p:571-583 is not listed on IDEAS
    2. Chen, Y.-H. Henry & Paltsev, Sergey & Reilly, John M. & Morris, Jennifer F. & Babiker, Mustafa H., 2016. "Long-term economic modeling for climate change assessment," Economic Modelling, Elsevier, vol. 52(PB), pages 867-883.
    3. Bitros, George C., 2016. "A theory of maintenance expenditures tested on automobile data from Greece," MPRA Paper 70820, University Library of Munich, Germany.
    4. Sebastian Rausch and Valerie J. Karplus, 2014. "Markets versus Regulation: The Efficiency and Distributional Impacts of U.S. Climate Policy Proposals," The Energy Journal, International Association for Energy Economics, vol. 0(Special I).
    5. Tapia-Ahumada, Karen & Octaviano, Claudia & Rausch, Sebastian & Pérez-Arriaga, Ignacio, 2015. "Modeling intermittent renewable electricity technologies in general equilibrium models," Economic Modelling, Elsevier, vol. 51(C), pages 242-262.
    6. repec:kap:enreec:v:70:y:2018:i:2:d:10.1007_s10640-017-0130-y is not listed on IDEAS
    7. Hong, Sungjun & Chung, Yanghon & Kim, Jongwook & Chun, Dongphil, 2016. "Analysis on the level of contribution to the national greenhouse gas reduction target in Korean transportation sector using LEAP model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 549-559.
    8. Paltsev, Sergey & Chen, Y.-H. Henry & Karplus, Valerie & Kishimoto, Paul & Reilly, John & Loeschel, Andreas & von Graevenitz, Kathrine & Koesler, Simon, 2015. "Reducing CO2 from cars in the European Union: Emission standards or emission trading?," CAWM Discussion Papers 84, University of Münster, Center of Applied Economic Research Münster (CAWM).
    9. repec:kap:transp:v:45:y:2018:i:2:d:10.1007_s11116-016-9741-3 is not listed on IDEAS

    More about this item

    Keywords

    CGE model; Transport; Energy efficiency; Alternative fuel vehicles;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics

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